What factors do bank managers consider before granting loan?

What factors do bank managers consider before granting loan?

In addition to the factors discussed above, according to the Central Bank of Nigeria, to be eligible for personal loans, you must have a bank account with the bank you want to borrow from; you must be mentally fit; you must be credible; you must have good credit rating, and you must be able to repay.

What are three of the factors that must be considered by the creditor before seeking a loan?

7 Factors Lenders Look at When Considering Your Loan Application

  • Your credit.
  • Your income and employment history.
  • Your debt-to-income ratio.
  • Value of your collateral.
  • Size of down payment.
  • Liquid assets.
  • Loan term.

What factors do banks consider when giving loans?

Banks evaluate your company’s debt repayment history, your business references, the quality of your product or service, and whether you have a good reputation. As a business owner, your personal handling of credit is also an excellent gauge of your likeliness to repay a business loan.

What 2 factors does a banker look at before giving you a loan?

Capacity. Lenders need to determine whether you can comfortably afford your payments. Your income and employment history are good indicators of your ability to repay outstanding debt. Income amount, stability, and type of income may all be considered.

What are the three major factors that you will consider before lending?

Given below is a list of the common factors that banks prefer looking at before approving home loans.

  • Credit history. Banks prefer lending money to people who are known to have good financial habits.
  • Occupation.
  • Age.
  • Distance.
  • Work experience.
  • Income source of the spouse.
  • Relationship with the bank.
  • Purpose of the loan.

What are the four C’s of lending?

Standards may differ from lender to lender, but there are four core components — the four C’s — that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

What is the principle of lending?

Answer ( 1 ) The lending process in any banking institutions is based on some core principles such as safety, liquidity, diversity, stability and profitability. While giving out loans, the lender, i.e, banks look at the capacity of the borrower to repay the loan.

How can you build a good credit history?

Using credit responsibly is a must if you to build and maintain a good credit history.

  1. Only Borrow What You Can Afford.
  2. Use Only a Small Amount of the Credit You Have Available.
  3. Start With Only One Credit Card.
  4. Pay Your Credit Card Balance in Full.
  5. Make All Your Payments on Time.
  6. If You Carry a Balance, Do It the Right Way.

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